Mobile retail chain launched in Bangalore
Posted on | April 18, 2006 |
MobileNXT, India’s first retail chain specialising in mobile products and services will be launched in Gurgaon within a week, reports DNA.
The concept stores will offer a complete range of handsets from top five brands, 100 accessories, after sales services, value added services, data transfer facilities and an exchange programme. They will also have kiosks from which music, ringtones and wallpapers can be downloaded, he said.
Romy Juneja, Founder and COO, MobileNXT, says the Bangalore headquartered company is being backed by a consortium of investors with $5 million investment.
According to founder and CEO Vijay Menon, the chain store model in telecom business is proven globally.
- In the first year, 31 stores will be opened, followed by 97 in the second and 170 in the third year.
- A Rs 380 crore turnover is our business plan for the third year.
- Primary focus will be on Tier-II and Tier-III cities.
I think the company has identified a definite business opportunity as the Indian mobile user is indeed underserved as far as the after sales service is concerned. The average lifetime of a mobile is 18-24 months and if the chain manages to keep the customer happy, he will continue to give business by way of service fees, accessory sales and handset upgrades. Mobile content and other VAS offer the upside to such businesses. The key to success in any service business is customer service and responsiveness to his needs.
It also remains to be seen if the strategy and execution succeed in making it a viable business and how do they address the following issues.
- Capital expenditure required for setting up a nationwide retail chain
- Choice of retail route - in Malls, Superstores or Shopping area
- Thinning of margins on hardware
- Cost of human-support and service
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2 Responses to “Mobile retail chain launched in Bangalore”
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VeerChand Bothra
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April 19th, 2006 @ 3:04 pm
I seriously doubt that this model is scalable. I mean not only the Mobile Nxt but any specialty retailer is going to face a tough competition from the likes of Reliance Retail and Big Bazaar .
Reliance is focusing on White Goods/Electronics very seriously . They have roped in heavy weights like Rajeev Karwal to manage the electronic vertical. They will surely have a price advantage due to their scale of procurements. Given that Indians are an extremely price sensitive consumer it will be tough for Mobile to make margin and have a sustained revenue .
VAS market is also fairly nascent and limited to entertainment activities like ring tone, wallpaper etc. there is not a single good mobile biz application popular in India. Even blackberry is successful in elite class only .
All the noise of high sales of handset is because folks at bottom of consumer pyramid are falling to buy handset. So will these folks be interested in buying a cell handset if they have to pay Premium of Brand ,Store etc. I guess not .
I see three possible outcome here
Will promoter and VCs go for a mass market approach by serving the low end of spectrum and loosing the sheen of a specialty store .?
Will any retail major acquire them?
Will they be Indian version of Fry’s of Silicon Valley ?
Coming months will be interesting as we will find the answer to these Questions
Good Post
Prashant
May 5th, 2009 @ 7:24 pm
[...] Telecom retailing is attracting the biggies. Soon after Bangalore-based MobileNXT launched its first store in Gurgaon, players like Pantaloon Retail and Essar Group are also reported to be [...]